Serious about Sustainability – Is Apple the company of the future?

Apple is the world's first trillion dollar company (as of late October 2018) leading in technology, innovation and creativity.

Apple's logo with a green leaf, signifying its commitment to become more sustainable in its business practices. Source: Reuters

As of Apple’s Q3 earnings report, these key figures stand out:

- $53,265 M in revenue, Q3 earnings.

- 41.3m iPhones sold.

- 11.5m iPads.

- 3.7 imacs.

With a vast range of products on sale by Apple, a heavy focus on being a leader in sustainable production is a must. Analysis of the Q3 reports suggest the sale of new products are at an aggressive growth rate of 17%, suggesting that materials such as the favorable Aluminium should be sourced ethically or better, re-used.

Greenpeace – How do the ratings affect Apple and what do they mean?

Since 2007, Apple has dedicated time and effort to reduce their global footprint and this has certainly paid off. From starting materials to the finished product, Apple has promised to scale back the excess toxic waste from its factories – which according to Apple’s green report (supplementary to the quarterly financial reports) has stated that the majority of their factories now operate on 100 percent renewable energy.

In addition, Greenpeace’s own reports highly commend Apple and Google to be the leading technology companies who have matched their increases in revenue growth with an equivalent or larger usage of renewable energies. With Greenpeace ratings of ‘A’, this means that Apple has done well in the following subcategories where sustainability becomes the biggest issue - energy transparency, renewable energy commitment, energy efficiency and mitigation, and renewable procurement.

Lisa Jackson, Vice President of Environment, Policy and Social Initiatives had this to say about their ongoing 2018 responsibility report:

“More than a decade ago, we started to transition our electricity use to renewable sources. Today, we’re proud to power 100 percent of our operations around the world with 100 percent renewable energy. That means every Apple data center, retail store and our corporate offices in 43 countries around the world now runs on clean power.”

Apple being a leader in environmental issues – Two green bonds amounting to $2.5 billion

It is remarkable to know that Apple had become one of the first tech companies to issue green bonds. Being the largest of any U.S corporation to date, $1.5 billion was issued in 2016 and has now reached $2.5 billion – two green bonds in total. With this amount of capital available, Apple has allocated an impressive $495.9M to green building projects, with new ‘green buildings’ set up beyond Apple Park assisting the much needed expansion of Apple data sites.

It amounts to almost 4,690,000 square feet (approximately 1.7x the square footage of the Empire State Building). Japan’s latest facility boasts onsite rainwater capture systems – a reduction in 75 percent water usage (compared to the international building code rules which allow sites to operate at levels much more than this). Apple taking initiative and driving towards more environmentally-run offices is paramount if sustainability is the end goal – not a legal requirement that must be obeyed which many companies follow.

In addition, Apple has actively started to introduce its Hardware Reuse Program which allows users to exchange their old products with a generous discount on the latest products by Apple. With average savings of 38 percent on new products when using this service, Apple has been able to extend its product life cycle. With the user’s old products, their units are rigorously tested to establish the usability and alterations are made if necessary. Then, existing parts and components are replaced and finally distributed for internal use. By the end of 2017, Apple had reported that 50 metric tons of material had successfully been re-used.

Still a long way to go?

With Apple’s green bonds only being issued for a relatively short time, it is important to note future earnings reports for Apple – whilst we can expect the green bonds to go a long way, this needs to continue. Greenpeace has currently ranked Apple sixth in Greenpeace’s Guide to Greener Electronics; ranking below companies such as Dell and HP but above those like Samsung and Sony. Greenpeace also claims that Apple could improve on their “Lack of Transparency” issues.

On the contrary, Apple’s latest product, the new Macbook Air, has been revealed to have a 100 percent re-used aluminium shell. By incorporating innovative technology, Apple has been able to extract small fibers of waste aluminium and compress them to create a new custom alloy. This is a breakthrough for Apple, however its retail pricing still remains high with starting models above $999. Does the price reflect the usage of re-used material and project it as a high-end product?

With the constant increases in product ranges and mounting pressures to meet consumer demand, Apple must ensure that it can still keep up with this demand and address the issue of an ever-increasing change in global warming; otherwise it may undo everything it has currently done. Will the green bonds have had a true global impact by then?

References used:

Hall, Z (2018). Apple announces Q3 2018 revenue of $53.3b: 41.3m iPhones, 11.5m iPads, 3.7m Macs. https://9to5mac.com/2018/07/31/apple-earnings-fy18-q3/ [Online]

Apple Inc. Q3 Unaudited Summary Data (2018). https://www.apple.com/newsroom/pdfs/Q3FY18DataSummary.pdf. [Online]

Scheer, R and Moss,D (2014). Is Apple Really Serious About Sustainability? http://business-ethics.com/2014/04/27/11639-is-apple-really-serious-about-sustainabilit/ . [Online]

Annual Green Bond Impact Report 2017 Update. http://files.shareholder.com/downloads/AAPL/4034275272x0x928237/03A2856E-EA7A-4FD0-9C0D-37963A4336DB/Apple_GreenBond_Report_Feb2018.pdf . [Online]

Moloney, C (2017). Is Apple a Sustainable Company? https://www.poplarnetwork.com/news/apple-sustainable-company . [Online]